Right to Transitional Credit Upheld: Andhra Pradesh HC Quashes Reversal of GST-Excise Credit [Read Order]
The judgment relied on the earlier directions of the Supreme Court in the Filco Trade Centre matter for reopening the GST portal.
![Right to Transitional Credit Upheld: Andhra Pradesh HC Quashes Reversal of GST-Excise Credit [Read Order]](https://images.taxscan.in/h-upload/2025/11/01/2101389-gst-reversal-taxscan.webp "Right to Transitional Credit Upheld: Andhra Pradesh HC Quashes Reversal of GST-Excise Credit [Read Order]")
The Andhra Pradesh High Court held that transitional credit relating to excise duty-paid stock is allowable and cannot be denied on the ground that the assessee failed to upload Form TRAN-3 initially. The Court directed the authorities to permit transition of credit and set aside the GST demand raised pursuant to its rejection. The petitioner, Mahavir Auto Diagnostics Private Limited,...
The Andhra Pradesh High Court held that transitional credit relating to excise duty-paid stock is allowable and cannot be denied on the ground that the assessee failed to upload Form TRAN-3 initially. The Court directed the authorities to permit transition of credit and set aside the GST demand raised pursuant to its rejection.
The petitioner, Mahavir Auto Diagnostics Private Limited, a registered dealer under the Andhra Pradesh Value Added Tax Act, 2005, migrated into the Goods and Services Tax from 01.07.2017.
The petitioner had stock on which excise duty had already been paid and sought transition of the said credit under Section 140 of the Central Goods andServices Tax Act, 2017. While the petitioner filed TRAN-1, they were unable to upload TRAN-3 due to technical issues, resulting in a show-cause notice dated 14.01.2020 proposing reversal of transitional credit.
Despite a reply dated 28.07.2022, the Superintendent of Central Tax passed an order on 10.02.2023 reversing the credit. The Order-in-Appeal dated 30.11.2023 confirmed the same.
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The Supreme Court in Union of India vs. Filco Trade Centre Pvt. Ltd. (2022) directed reopening of the portal for taxpayers to submit TRAN forms from 01.09.2022 to 31.10.2022, later extended to 30.11.2022. The petitioner submitted TRAN-3 on 29.11.2022 within this extended window.
However, the forms were rejected based on Circular No. 180/12/2022-GST dated 09.09.2022, which stated that where adjudication regarding transitional credit is pending, filing fresh declarations is not permissible.
The Bench comprising Justice R. Raghunandan Rao and Justice Sumathi Jagadam observed that the circular applies only where the eligibility of the credit itself is in dispute. The High Court held that the rejection of the credit was not justified and directed the respondents to allow the petitioner to avail the credit by permitting its transition into the GST Act.
It was further held that any demands raised due to the rejection of transitional credit shall stand quashed.
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